The Scandinavian Reform Model and the European Union. The Lisbon Agenda and the Scandinavian model(s)?

[From the introduction]. The European Union at 50 years has become a complex and comprehensive entity. That may be a source of its strength but it is also a cause of skepticism for many Europeans. While the daily operation of the EU focuses principally upon its economic functions – the single market, the Economic and Monetary Union (EMU), international trade and financial negotiations, etc., the EU has also become a force for policy evaluation and collective goals. Such aims are regularly expressed at periodic EU summits (meetings of the European Council) and other occasions (most recently the Berlin Declaration of March 2007). Periodically the EU launches broad policy initiatives that are supposed to commit the Union to future goals and regular monitoring of progress toward those goals. Such an initiative was launched in Lisbon, Portugal, at the EU summit in March 2000. The Lisbon Agenda (also called the Lisbon Goals or Lisbon Strategy) was ambitious, broad and vague in details. It called for revival of the sluggish EU economies and aimed to make the EU the most competitive and dynamic knowledge-driven economy in the world by 2010. It called specifically for increased economic growth and reduced unemployment, expanded investment in higher and continuing education and research and development efforts, and modernization of the “European social model” (i.e. welfare state) to protect the vulnerable and excluded (European Union. Council, 2000). The employment rate target of 70% of the 15-64 population being gainfully employed by 2010, up from 63.5% in 2000, was particularly ambitious. The Lisbon initiative added another layer of policy “surveillance” to the growing list of regional public policy monitoring. In addition to the macroeconomic data and analysis required in fulfillment of the Stability and Growth Pact of the EMU, various sectoral convergence programs, and broader EU evaluations, the Lisbon Agenda promised benchmarking of policy reforms and performance. In addition all of the fifteen EU countries that adopted the 2000 program are part of the broader policy network of the Organization for Economic Cooperation and Development (OECD) which has its own program of surveillance and benchmarking. There is no silence as to the aims of advanced western states in the social, economic, and policy arena. Implicit and often explicit in these common policy objectives is the expectation that national or regional experiences can assist other states in their reform efforts. “Lesson-learning” and policy emulation have a long history, but rarely have pressures for improved performance and ranking of achievements been greater. Despite the difficulties of comparing policies and performance across a growing and diverse community of advanced industrial states, elites and attentive publics look for “models” of success. The Scandinavian states, three of which are full EU members (Denmark, Finland, and Sweden) while two belong to the European Economic Area (Iceland and Norway), have again come into view as interesting cases of success. In part this is the result of their rapid recovery from economic difficulties – in some cases quite severe – during the recent past (1980s - 1995). It is also because these small but open societies have long attracted outside observers and believe themselves to be a distinct policy “region.” In this paper we argue that the Scandinavian policy reforms of the past two decades have not only reinforced their comprehensive welfare states but demonstrate that such welfare states are fully compatible with healthy economic growth and structural change. We will offer evidence that the Scandinavian “model” has again emphasized reform and adjustment but also continues to demand a commitment to solidarity. We will argue that their democratic corporatist structures that involve the labor-market partners in making and administering national policy have been supportive of this adaptation. The Scandinavian solution remains expensive in terms of taxation, but has not “frozen” policies into a strict mold. Its commitment to child allowances, paid maternity (now parental) leave, and public provision of excellent child care and care of the elderly encourage much higher levels of female labor force participation than has been the European norm; indeed, it is difficult to see how the Lisbon employment rate target can be achieved without similar policies in other European Union countries. Finally the “flexicurity” model emphasizes security and opportunity at the “macro” level – new skills, new jobs, and transitional assistance without locking employees into declining firms and sectors